The long-delayed construction of downtown San Diego’s first five-star hotel could potentially move forward now, following a court ruling this week rejecting a legal challenge of the $400 million luxury development.

San Diego-based Cisterra had hoped to have been well under construction by now on the hotel, office, and residential project, but put everything on hold after a lawsuit was filed late last year contending that the environmental analysis was flawed.

The suit, filed by hotel union leader Sergio Gonzalez and San Diegans for Responsible Planning, a coalition of community and union members living and working in San Diego, also targeted a second downtown project that calls for a 20-story, 324-room hotel a block away. Both the city of San Diego and Civic San Diego, the city’s downtown planning agency, were named in the complaint.

Cisterra now hopes to move forward on its 7th & Market project, but was unable to say Friday how soon that would be because it did not know whether the judge’s ruling would be appealed.

“We're pleased with the outcome and we look forward to getting the project under construction as soon as possible to deliver what we know is a fabulous project for San Diego,” said Cisterra project principal Jason Wood.

Los Angeles attorney Gideon Kracov, who represents San Diegans for Responsible Planning and also has worked on behalf of the Unite Here Local 30 union, said Friday that “at this point,” the plan is to appeal the ruling.

In addition to a 153-room Ritz-Carlton, the 7th & Market project also includes plans for a Whole Foods grocery store, 156,000 square feet of office space, 125 apartments and 59 Ritz-branded condos. Integrated among the apartments will be an additional 34 units reserved for lower income renters.

In his suit , Kracov contended that city approvals last year relied on an outdated 2006 environmental analysis for all of downtown instead of individual reports that would have specifically analyzed the environmental impacts of the 7th & Market project and the hotel development planned for Seventh and Island avenues.

In his ruling, Superior Court Judge Gregory Pollack concluded that “substantial evidence exists to show that (the) City properly found that the Projects comply with the applicable land use plans and that they would not be detrimental to public health, safety or welfare.”

He also rejected the lawsuit’s claim that the city improperly delegated land use authority to Civic San Diego.

“In the Court's opinion...the City properly delegated its authority to CivicSD to issue development permits based on the Consistency Evaluations conducted under CEQA (California Environmental Quality Act),” Pollack wrote.

Kracov disagreed, which is why he said his clients are planning an appeal.

“Plaintiffs are concerned that the ruling requires the city's Planning Commission to rubber stamp the decisions of non-governmental independent contractor Civic San Diego, no matter how bad the decisions may be,” he said. “As community members who live, work, and pay taxes in San Diego, Plaintiffs will continue to exercise their right to challenge this status quo.”

Civic San Diego said Friday it was gratified by the judge’s conclusion that it has the legal right to issue development permits.

“The ruling is a validation that our process and procedures follow the best practices in environmental review for downtown projects.” said Brad Richter, Civic San Diego’s assistant vice president of planning. “We hope the project developer and financing partners now feel confident about moving forward with the project.”

While the lawsuit never raises the issue of union jobs in connections with the challenged projects, Unite Here had previously pressed Cisterra and its tenants for a commitment to offer well-paying union jobs.

While Cisterra had already consented to a labor agreement that would ensure the hiring of union workers for the construction of the project, it had previously said in public hearings that it had no authority to make labor demands of the Ritz-Carlton.

“Cisterra has done everything in its control to be as labor friendly as possible,” Wood said Friday, “but we need to have a project that makes financial sense and we felt we could do that that with a project labor agreement.”

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